Gas and electricity provider Tomato Energy has gone into administration, leading to regulatory intervention to safeguard energy provision for 15,300 households and 8,400 businesses.
The company faced insolvency due to accumulating debts of £3 million and a prohibition on acquiring new customers since April. Consequently, Tomato Energy is ceasing operations, but existing customers will not experience any service interruptions, as assured by Ofgem.
Rohan Churm, overseeing financial resilience and control, emphasized that customers need not be concerned. Their energy supply will remain uninterrupted, and any credit balances held by residential customers are protected under Ofgem regulations.
Efforts are underway to appoint a new supplier for all current customers, advising them not to switch providers presently. Once a new supplier is selected, customers will receive detailed guidance from the new provider.
Ofgem will notify Tomato Energy customers once a supplier is designated to take over the energy supply. Customers will be placed on a “deemed” contract, potentially incurring higher costs, yet they retain the flexibility to cancel at any point.
In response to a recent wave of supplier collapses, energy companies are mandated to maintain a financial safety net. Although fewer companies have folded since the enforcement of these regulations, Churm acknowledged that market competition may still result in occasional failures. The primary objective is to safeguard consumers in such situations and minimize associated expenses.